Public versus Private: Contrasts in Contracting Practices

July 10, 2013

IACCM recently undertook a study to compare the attitudes to contracting between the private (commercial) sector and the public (government) sector. It sought input on some of the key values that drive and motivate contracting personnel. It also gathered information on how contracts are viewed – for example, are they just an administrative necessity, or do they assist in generating value?

The research revealed that many core attitudes are the same, not just between public and private, but also between major geographies. However, there are substantial differences in key areas, especially those that closely relate to the generation of value and the quality of relationships.

For example, while public and private sector are pretty much neck-to-neck in their attitudes towards integrity, fairness, social responsibility and the desire to achieve value, they diverge significantly in some of the areas that actually make these policy objectives achievable. Some of these differences most likely relate to caution regarding the interpretation of public procurement rules or policy; but ironically, this caution also appears to reduce the level of public sector insight to wider risk issues.

Among the major differences were:

Private sector personnel are almost 80% more likely to be influenced by the need to promote competition and minimize operating costs

Private sector personnel are almost 70% more likely to be influenced by a drive to fully exploit market opportunities

Private sector personnel are 34% more likely to take a holistic view to minimizing operating risk (financial, legal and contractual)

Private sector personnel are 25% more likely to place value on building customer or supplier loyalty and showing respect for trading partners